In this edition, we discuss ASIC’s announcement of the FY25-26 financial reporting and audit focus areas, an application received by the Takeovers Panel in relation to the affairs of Keybridge Capital Limited (ASX:KBC) (KBC) and the Takeovers Panel’s decisions to decline to conduct proceedings in relation to the affairs of Pact Group Holdings Ltd (ASX:PGH) (Pact Group) and Emu NL (ASX:EMU).
In Over the Horizon, we discuss recent commentary in response to ASIC’s discussion paper on the dynamics between public and private markets.
Regulatory
ASIC announces FY25-26 financial reporting and audit focus areas
On 19 May 2025, ASIC published its financial reporting and audit focus areas for the 2025-2026 financial year. Key takeaways include:
ASIC will continue to focus on areas where judgement is required from preparers of financial reports (for example, revenue recognition, asset valuation and estimation of provisions).
The regulator will review an increased number of audit files where a change has been made to financial information or where it has concerns that there may be a material misstatement.
With respect to audited financial reports lodged by registrable superannuation entities, ASIC will focus on the measurement and disclosure of investment portfolios and the disclosure of marketing and advertising expenses.
Sustainability reports for financial years ending 31 December 2025 will be reviewed as part of ASIC’s 2025-26 program with observations to be shared to assist preparers.
ASIC is progressing its surveillance focused on auditors’ compliance with independence and conflict of interest obligations under the Corporations Act 2001 (Cth) (Corporations Act).
Legal
Takeovers Panel publishes reasons for its decision not to conduct proceedings in relation to the affairs of Emu NL
On 19 May 2025, the Panel published the reasons for its decision not to conduct proceedings on an application from Emu NL in relation to its own affairs. As discussed in previous editions of Boardroom Brief, Emu NL’s application concerned an alleged association among shareholders in the context of a requisitioned board spill meeting. The Panel declined to conduct proceedings and its decision was affirmed on review. The Panel considered, among other things, that Emu NL shareholders voting in the same manner and discussing mutual concerns about the management of Emu NL was insufficient to demonstrate an association between the shareholders. In the absence of further evidence of an understanding or agreement regarding the exercise of voting rights, the Panel considered that similar voting behaviour between Emu NL shareholders merely reflected like-mindedness and there was no reasonable prospect that it would make a declaration of unacceptable circumstances.
On 21 May 2025, the President of the Panel made interim orders requiring Emu NL to provide to the Panel with copies of all proxy forms received in relation to the board spill meeting, including any that were disallowed, along with reasons for their disallowance. The Panel has not yet decided whether to conduct proceedings.
Takeovers Panel declines to conduct proceedings in relation to the affairs of Pact Group Holdings Pty Ltd
On 22 May 2025, the Takeovers Panel declined to conduct proceedings on applications dated 8 May 2025 from Mr Jeremy Machet and Scrap Invest Pty Ltd and dated 12 May 2025 from Mr Jeremy Raper in relation to the affairs of Pact Group and its proposed delisting. The applications alleged that, among other things, the proposed delisting would have a substantial coercive effect on minority shareholders. The Panel was not satisfied that the circumstances set out in the applications had or were likely to have an effect on the control or potential control of Pact Group, and therefore the Panel was not satisfied that the alleged matters fell within its jurisdiction and declined to conduct proceedings. The Panel will publish the reasons for its decision in due course.
Takeovers Panel receives application in relation to the affairs of Keybridge Capital Limited
On 23 May 2025, the Panel received an application from Yowie Group Ltd (Yowie) in relation to the affairs of KBC. On 9 May 2025, Yowie announced an intention to make an off-market takeover bid for all ordinary shares in KBC offering one Yowie share for each KBC share on issue (Offer). The application concerned the Offer and an announcement by KBC that KBC shareholders should “take no action” in relation to the Offer, pending KBC calling a meeting of Yowie shareholders to replace Yowie’s board under section 249F of the Corporations Act. Yowie submits that the meeting would frustrate the Offer, on the basis that it would trigger a defeating condition to the Offer and seeks interim orders that KBC be restrained from issuing a notice under sections 249F, 249D or 249G of the Corporations Act. A sitting Panel has not been appointed at this stage and no decision has been made whether to conduct proceedings.
NSW Supreme Court provides guidance on effective director resignation and minimum director requirements
On 15 May 2025, the Supreme Court of New South Wales published its decision in the context of the affairs of AMBBB Pty Ltd in In the matter of AMBBB Pty Ltd [2025] NSWSC 476. While the parties ultimately resolved their disputes by consent, the court considered the issues of director resignation and minimum director requirements. Justice Black held that, absent any relevant constitutional procedures, and in circumstances where the replaceable rules in the Corporations Act did not apply, the execution of a resignation together with proper delivery to the company is sufficient to affect a director's resignation. Justice Black also suggested that the requirement in section 201A of the Corporations Act – that a company have at least one director – should, in context, be interpreted as referring to a statutory director, rather than a de facto or shadow director.
Over the Horizon
Private capital under the microscope
ASIC’s recent discussion paper on Australia’s changing capital markets – in particular, the rapid growth of private markets and the decline in listings on the ASX – has sparked a wave of commentary from market stakeholders, including the ASX and the Australian Shareholders’ Association (ASA). In its recent submission, the ASX advocates for reforms to streamline initial public offerings, clarify financial forecast rules for prospectuses and reduce free float requirements to attract founder-led companies. The ASX also calls for a more accessible corporate bond market and renewed debate on dual class share structures. These proposals reflect growing concern that Australia’s public markets are losing ground to private capital. The ASA warned that the rapid expansion of private capital has outpaced regulatory oversight, raising concerns about transparency, governance and investor protection. The ASA refers to its 2025 Investor Sentiment Survey, which highlights three key concerns among investors regarding private markets: lack of transparency and perceived preferential treatment, poor management of conflicts of interest and challenges in valuing illiquid assets. Directors should expect further regulatory and investor scrutiny on whether additional regulatory intervention is needed and how governance expectations may shift in response.